Appraisals are important in any loan transaction. They identify an un-biased value for the property, frequently based on recent sales in the area. But appraisals on VA purchase loans also help ensure veterans and service members get homes that are safe, structurally sound and sanitary. The Minimum Property Requirements were established by the VA to ensure each property meets the three S's.
If you aren't familiar with the MPRs or just want a refresher, here are 10 basic MPRs a property must meet to pass the VA appraisal:
1. Entity. Ensures the property is a single structure that is ready to be placed on the market.
2. Nonresidential Use. VA loans are intended to help the buyer purchase a primary residence. Though in some cases, buyers are allowed to buy a home with 25% or less of the floor space designated as business or nonresidential space. But keep in mind that not all lenders will provide this type of financing.
3. Space Requirements. The property must have adequate space for the buyer and their families to live, sleep, cook, and eat. It must also have the proper sanitary facilities for such activities.
4. Mechanical Systems. The properties heating, cooling, and other mechanical systems must be in safe, working condition, and likely to remain in such condition.
5. Heating. VA appraisers consider this category superior to the Mechanical Systems Category. With multiple heating systems there are also multiple requirements. Homes with solar heating systems or wood-burning stoves used as the primary source of heat also need a back-up heat source. Properties located in warmer climates may not be required for such systems.
6. Water Supply and Sanitary Facilities. The VA requires buyers to live somewhere with hot water, as well as continually safe and potable drinking water. The property also needs to have an acceptable and sanitary sewage system in place. If the property is on a private well, a well test will be required.
7. Roof Covering. The roof must be leak proof, in good shape, and free of defects.
8. Crawl Space. If the property has a crawl space, the space must be accessible and free of debris. Any excessive moisture must be treated.
9. Ventilation. When referring to crawl spaces and attics the property must have proper ventilation in these areas. With ventilation, you will avoid problems with moisture related problems such as mold that could cause unsafe health conditions.
10. Electricity. The property must have working electricity.
Keep in mind, this list isn't exhaustive, there are additional minimum property requirements outlined by the VA, these are just the most common. If you have specific questions about the Minimum Property Requirements on VA Loans, just comment below or email me directly at education@vu.com.
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